A North Carolina appellate court has reopened the possibility of Mission Hospital building a new emergency room in Arden.
Last year, a lower court ruled in favor of two other hospital systems, Pardee and Advent, which sued, arguing state officials' process of approval for Mission deprived competing systems.
A Court of Appeals ruling this week found that Mission and the NC Department of Health and Human Services (DHHS) should have held a public hearing on Mission’s application for a Certificate of Need in 2022. But the lack of a hearing isn’t necessarily grounds for denying the approval, according to the ruling.
A Certificate of Need is a governmental approval required in many states, including North Carolina, before proposed creations, acquisitions or expansions of healthcare facilities are allowed. In North Carolina, DHHS has to approve applications before a new facility may be built. If the facility is expected to cost more than $5 million, state law requires a public hearing.
Instead of a public hearing, Mission and DHHS allowed for an “extended opportunity for written comment” during their 2022 application process for two emergency rooms, one in Arden and another in Candler, according to court documents. They did this “out of concern” for COVID-19.
DHHS granted certificates for both projects to Mission in 2022. A month later, Pardee and Advent, who also operate hospitals in the area, appealed both approvals, citing a lack of public hearings.
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Administrative Law Judge David Sutton reversed the approval of the certificates in June 2023, writing that the lack of public input hindered AdventHealth and Pardee from a fair chance at their own certificates.
“Deprivation of AdventHealth’s and Pardee’s right to speak at a public hearing in and of itself is substantial prejudice,” he wrote.
Sutton did, however, rule in favor of Mission and the department with every other issue raised by Pardee and AdventHealth – which ranged from claims about Mission’s monopoly to access to care for rural counties.
“There were a number of other CONs that were approved across the state during the more acute phases of the COVID public health emergency that did not have public hearings,” Nancy Lindell, Media and Public Relations Director for Mission Health, wrote in a statement after the decision last year.
In September 2023, Mission held what their spokesperson called a “do-over” for the Candler location, and DHHS again approved the ER certificate after public hearings for the $29 million project.
In the Arden case, Mission and DHHS appealed to the Court of Appeals, arguing that their process of gathering public input was legally sufficient. Pardee and Advent claimed the lack of a public hearing “substantially prejudiced” their ability to compete.
This week, Court of Appeals Judge Hunter Murphy said the lower court decision was “solely based on the reasoning that the failure to hold a public hearing constituted substantial prejudice.” While Mission and DHHS did not follow procedure, the question of how that affected Pardee and Advent remains, the decision said.
“Advent and Pardee do not satisfy their burden to show substantial prejudice occurred…the ALJ did not evaluate specific evidence on the record which would indicate whether or not any concrete harm came to Advent and Pardee that was not the result of generalized market competition,” Murphy wrote.
The appellate court remanded the case to the Administrative Law Judge. Advent Health and Pardee must “make a specific argument as to how that increased competition concretely affects their provision of services,” according to the appellate decision.
"Patients continue to choose Mission Hospital for emergency care, and Mission has been proactive in creating solutions to meet the rise in ER demand for the citizens of Western North Carolina by pursuing two Certificate of Need approvals for two additional free-standing ERs in spring of 2022," Nancy Lindell, Director of Media and Public Relations for Mission Health, wrote in a statement to BPR News.
"These ERs are solutions to help meet the needs of our community and bring quicker access to emergency care to South and West Asheville."
AdventHealth did not reply to emails from BPR News requesting comment.
DHHS declined to comment, stating that the agency "does not comment on ongoing litigation."
UNC Health Pardee General Counsel Walter Carpenter, wrote in a statement to BPR News that the hospital is “evaluating the full Court of Appeals’ opinion and determining next steps.”
Editor's note: This post has been updated to reflect comments from an HCA representative.
